General Management

Negative impacts of MNC’s

in Indian markets
 Problems brought by MNC
(to host countries)
 The host county is likely to lose its economic
sovereignty
 The host nation may also experience some loss
of control over its own economy
 Feeling that labour is being exploited by the
MNC/ Outsourcing
 Lost of cultural moorings
 The problem of Dumping
 Example – Chinese low quality products in
Indian market
 Industry Chosen :

Colour Television (CTV)

 Colour Television (CTV)
 The Indian colour TV (CTV) market is arguably one of
the most fascinating markets now in Asia or perhaps
even the world.
 Size of the Indian market : 5 million-sets-mark
 1984-85 growth rate was140.3%
 1985-86 fell to 68.6%,
 1988-89 was 15%
 1989-90 it touched a level of 5%
 1991-92 the sales of color televisions at -14.5%.
 After declining in 2000 and 2001, the Indian consumer
electronics market grew by 12.4% in current value in
2003, to reach Rs129.5 billion.
 A recent trend shows that TV market has grown to 373.5
per cent between January-March 2003.
 Contd…..
 Sony India, Samsung and LG are the dominant
players in the CTV segment.
 In March 2003 the CTV segment grew by 389.1
per cent
 Samsung leading the race with a market share
of 27 per cent
 Sony at 20.1 per cent and
 LG at 19.9 per cent.
 Main players in the
Indian market
Indian: BPL, Onida, Videocon
European: Philips
American: Thomson
Korean: Samsung, LG
Chinese: Akai, Sansui
Japanese: Aiwa, Sony, Panasonic, Sharp
CTV Sales over the years
 CTV Sales over the years
 AFTER a period of slump in 1999 and 2001, colour television
(CTV) sales had picked up again
 FY 2003 the industry reported an upward movement in sales
 The CTV market has grown rapidly in the last one decade in
India
 On the supply side, over the last two to three years, there has
been some intense activity in the CTV market, with increased
competition and players launching premium products
incorporating superior technology
 Till the late 1990s, the market was dominated by older
domestic players such as BPL, Videocon and Onida.
 Although they are still present in the market, they are
steadily losing ground to multinational players such as LG
and Samsung.
Most selling CTV brand

2003
 BPL
 BPL is an Indian electronics company. The acronym
stands for "British Physical Laboratories". It deals with
consumer electronics (such as refrigerators and washing
machines), mobile networks etc.
 The company was started at a time when the
government had reserved many areas of business for the
public sector
 BPL, CTVs have been the flagship business
 Over the years, BPL's growth has been subject to
constant challenges
 Using its experience of the market and the consumer,
BPL concentrated on importing technology, improving
product quality, innovations and manufacture of
electronic products that enhanced the quality of life
 Onida
 Onida, a leading television brand, is still well known for
its brand mascot ‘The Onida Devil’ and its punch line
“Neighbor's Envy Owner’s Pride”.
 Onida launched its advertising campaign in the 1980s
when owning a television set was considered a luxury,
 The mascot helped Onida gain substantial market share
and brand recall among the customers and become one
of the top three television brands in the country.
 In 1998, Mirc Electronics (the owner of Onida brand)
decided to abandon the “Onida Devil” in its
communication campaigns as the brand mascot no
longer appealed to the Indian consumer.
 Samsung
 Samsung India is the hub for Samsung’s South West
Asia Regional operations
 Sports Marketing and Entertainment Marketing have
been the key elements of the Company’s Brand
Marketing Strategy
 Samsung’s uses state of the art highly automated
manufacturing facilities
 Samsung has been awarded as the Best Retailer of the
year 2005
 Samsung India commences exports of 'Made in India'
Colour televisions to Western Europe
 A Second Production Line set up at Noida for the
manufacture of Projection TVs in India
 LG life’s good
 LG Electronics India Pvt. Ltd., a wholly owned
subsidiary of LG Electronics, South Korea was
established in January, 1997.
 LG has been able to craft out in eight years, a premium
brand positioning in the Indian market and is today the
most preferred brand in the segment.
 In 2003, LG has emerged as the leader in Colour
Televisions, Semi Automatic Washing Machines, Air
Conditioners, Frost-Free Refrigerators and Microwaves
Ovens.
 The company has achieved a turnover of Rs 6500 crore
in 2004 and aims to touch a turnover of 10 Billion US
Dollars by 2010
 As on today, LG is the No 1 brand in the CTV market.
 Why Indian companies lost
its market share to MNC’s
Primarily because of the following reasons:

 They lagged behind in technology

 They offered a small range of products
 Provided less margin to dealers
 Less number of outlets.
 Poor after sales services
 Most of the BPL galleries were transformed by
the dealers into a gallery with a range of products
from different manufacturers
 Contd…
What MNC’s did?

Multinationals such as LG and Samsung

managed to increase their market share on the
strength of aggressive marketing
 What Indian companies
are now doing to regain
their market share
 Better Innovations to products
 Better pricing techniques
 Better positioning of the brand
 Following an aggressive marketing
 Trying to move the after sales service to a new
level
 Segmentation of the product range by creating
specific sub-brands
 What did BPL do?
BPL tied up with Sanyo (a Fortune 500 consumer
electronics major ). The key points to their strategy
to gain a good market share are as follows-

 Right pricing and the right product.

 Product positioning
 Strong regional presence
 Different prices in different show rooms
Benefits from MNC
 To Host Countries
 Transfer of technology, capital and
entrepreneurship to the host country
 Employment
 Improved competition in the host country and
ultimately better utilization of available
resources
 More products for local consumers
 Greater access to high quality managerial talent
that tends to be scarce in the host country,
particularly developing ones
 Encourages the world unity and all resulting in
world harmony
 To home countries
 Acquisition of raw materials from abroad,
steady supply of raw material at a lower price
that can be found domestically
 Technology and management expertise acquired
from competing in global markets
 Export of components and finished goods for
assembly or distribution in foreign markets
 Inflow of income from overseas profits, royalties
licensing fees and management contracts
 Job and career opportunities at home and
abroad in connection with overseas operations.
Thank you!!

By-
 Darshna Iyer
 Sampada Chavan
 Deepak Agarwal
 Shantanu Chaubal
 Minal Damle
 Amit Chavan
 Vinay Dhake
Questions???